Supreme Court of the United States

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1 No. 11- IN THE Supreme Court of the United States SOUTHERN UNION COMPANY, v. UNITED STATES, Petitioner, Respondent. On Petition for a Writ of Certiorari to the United States Court of Appeals for the First Circuit PETITION FOR A WRIT OF CERTIORARI DANIEL R. BENSON DAVID E. ROSS KASOWITZ, BENSON, TORRES & FRIEDMAN LLP 1633 Broadway New York, NY (212) CARTER G. PHILLIPS* JEFFREY T. GREEN JACQUELINE G. COOPER SIDLEY AUSTIN LLP 1501 K Street, N.W. Washington, D.C (202) cphillips@sidley.com July 15, 2011 Counsel for Petitioner * Counsel of Record

2 QUESTION PRESENTED Whether the Fifth and Sixth Amendment principles that this Court established in Apprendi v. New Jersey, 530 U.S. 466 (2000), and its progeny, apply to the imposition of criminal fines. (i)

3 ii PARTIES TO THE PROCEEDING All parties to the proceeding are identified in the caption. RULE 29.6 STATEMENT Pursuant to Rule 29.6 of the Rules of this Court, petitioner Southern Union Company states that it has no parent corporation and that no publicly held corporation owns ten percent or more of its stock. New England Gas Company is a division of Southern Union Company. The Company has entered into a merger agreement with Energy Transfer Equity, L.P. ( ETE ), a publicly traded partnership, pursuant to which ETE will acquire the Company.

4 TABLE OF CONTENTS Page QUESTION PRESENTED... i PARTIES TO THE PROCEEDING... ii RULE 29.6 STATEMENT... ii TABLE OF AUTHORITIES... v OPINIONS BELOW... 1 JURISDICTION... 1 CONSTITUTIONAL AND STATUTORY PRO- VISIONS INVOLVED... 1 STATEMENT OF THE CASE... 2 A. Factual Background... 3 B. Proceedings Below... 4 REASONS FOR GRANTING THE PETITION I. THE DECISION BELOW CONFLICTS WITH DECISIONS OF OTHER COURTS OF APPEALS THAT APPLY THE APPRENDI PRINCIPLE TO CRIMINAL FINES II. THE COURT OF APPEALS RULING UNDERMINES CRIMINAL DEFEN- DANTS FIFTH AND SIXTH AMEND- MENT RIGHTS III. THE COURT OF APPEALS RULING POSES AN ISSUE OF FUNDAMENTAL IMPORTANCE CONCLUSION APPENDICES APPENDIX A: United States v. S. Union Co., 630 F.3d 17 (1st Cir. 2010)... 1a (iii)

5 iv TABLE OF CONTENTS continued Page APPENDIX B: United States v. S. Union Co., Cr. No S, 2009 WL (D.R.I. July 9, 2009)... 39a APPENDIX C: United States v. S. Union Co., No (1st Cir. Feb. 17, 2011)... 49a

6 CASES v TABLE OF AUTHORITIES Page Apprendi v. New Jersey, 530 U.S. 466 (2000)... passim Blakely v. Washington, 542 U.S. 296 (2004)... 12, 18, 21, 23, 26 Cent. Va. Cmty. Coll. v. Katz, 546 U.S. 356 (2006) Cunningham v. California, 549 U.S. 270 (2007)... 12, 21, 26 Damper v. United States, 2006 U.S. Dist. LEXIS (S.D. Miss. July 11, 2006) Harris v. United States, 536 U.S. 545 (2002)... 21, 26 Lauria v. United States, 2006 U.S. Dist. LEXIS (D. Conn. Dec. 13, 2006) Oregon v. Ice, 129 S. Ct. 711 (2009)... 6, 9, 19, 20, 26 In re Permian Basin Area Rate Cases, 390 U.S. 747 (1968) Ring v. Arizona, 536 U.S. 584 (2002)... 12, 18, 26 Rita v. United States, 551 U.S. 338 (2007) Shkolir v. United States, 2002 U.S. Dist. LEXIS 9830 (S.D.N.Y. May 31, 2002) State v. Cain, 888 A.2d 276 (Me. 2006) State v. Kozlowski, 898 N.E.2d 891 (N.Y. 2008) United States v. Booker, 543 U.S. 220 (2005)... 12, 18, 26 United States v. Boothe, 2001 U.S. Dist. LEXIS (E.D. La. Oct. 5, 2001) United States v. LaGrou Distrib. Sys., Inc., 466 F.3d 585 (7th Cir. 2006)... 12, 13, 18

7 vi TABLE OF AUTHORITIES continued Page United States v. Pfaff, 619 F.3d 172 (2d Cir. 2010), cert. denied, 79 U.S.L.W (June 27, 2011) (Nos & )... 14, 18 United States v. W. Coast Aluminum Heat Treating Co., 265 F.3d 986 (9th Cir. 2001) United States v. Yang, 144 F. App x 521 (6th Cir. 2005) CONSTITUTION, STATUTES, AND REGULATION U.S. Const. amend. V... 1 amend. VI U.S.C , U.S.C , 5 40 C.F.R RULE Sup. Ct. R. 10(c) SCHOLARLY AUTHORITIES John M. Connor & Robert H. Lande, How High Do Cartels Raise Prices? Implications for Optimal Cartel Fines, 80 Tul. L. Rev. 513 (2005) Timothy A. Johnson, Sentencing Organizations After Booker, 116 Yale L. J. 632 (2006) Erik Lillquist, The Puzzling Return of Jury Sentencing: Misgivings About Apprendi, 82 N.C. L. Rev. 621 (2004)... 25

8 vii TABLE OF AUTHORITIES continued Page Kathryn Preyer, Penal Measures in the American Colonies: An Overview, 26 Am. J. Legal Hist. 326 (1982) Phillip C. Zane, Booker Unbound: How the New Sixth Amendment Jurisprudence Affects Deterring and Punishing Major Financial Crimes and What to Do About It, 17 Fed. Sent g Rep. 263 (2005) OTHER AUTHORITIES U.S. Sentencing Comm n, 2010 Annual Report, available at gov/data_and_statistics/annual_reports _and_sourcebooks/2010/ar10toc.htm , 27 U.S. Sentencing Comm n, 2010 Sourcebook of Federal Sentencing Statistics, available at and_statistics/annual_reports_and_sou rcebooks/2010/table15.pdf... 27

9 PETITION FOR A WRIT OF CERTIORARI Petitioner Southern Union Company respectfully petitions for a writ of certiorari to review the judgment and opinion of the United States Court of Appeals for the First Circuit. OPINIONS BELOW The decision of the court of appeals, Pet. App. 1a- 38a, is reported at 630 F.3d 17. Its order denying the petition for rehearing en banc, Pet. App. 49a-50a, is unreported. The opinion of the district court, Pet. App. 39a-48a, is reported at 2009 WL JURISDICTION The court of appeals issued its decision on December 22, Pet. App. 1a. A timely petition for rehearing en banc was denied on February 17, Id. at 49a-50a. On April 12, 2011, Justice Breyer extended the time for filing this petition to and including June 17, 2011, and on June 9, 2011, granted a further extension to and including July 17, The jurisdiction of this Court is invoked pursuant to 28 U.S.C. 1254(1). CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED The Fifth Amendment to the United States Constitution provides, in relevant part: No person shall be held to answer for a... crime, unless on a presentment or indictment of a Grand Jury... nor [shall] be deprived of life, liberty, or property, without due process of law. The Sixth Amendment to the United States Constitution provides, in relevant part: In all

10 2 criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury U.S.C provides, in relevant part: (d) Criminal penalties. Any person who (2) knowingly treats, stores, or disposes of any hazardous waste identified or listed under this subchapter (A) without a permit... shall, upon conviction, be subject to a fine of not more than $50,000 for each day of violation, or imprisonment not to exceed two years (five years in the case of a violation of paragraph (1) or (2)), or both. STATEMENT OF THE CASE The decision of the First Circuit conflicts with decisions of other federal courts of appeals on the question whether the Fifth and Sixth Amendment principles that this Court established in Apprendi v. New Jersey, 530 U.S. 466 (2000), and its progeny, apply to the imposition of criminal fines. In Apprendi, this Court held that any fact other than the fact of a prior conviction that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt. Id. at 490. While three courts of appeals have vacated criminal fines based on the principles established by Apprendi and its progeny, the First Circuit categorically held that the Apprendi rule does not apply to the imposition of statutorily prescribed fines, Pet. App. 2a, and, as a result, left intact the district court s fine, which was 360 times greater than the maximum fine that could

11 3 have been imposed based on the jury s verdict, finding a single day s violation of the applicable criminal statute. In so holding, the First Circuit recognized the conflict with its sister circuits and essentially invited this Court s review by acknowledging that the issue is close and determines the outcome in this case. Id. The decision below cannot be squared with either this Court s decision in Apprendi or its subsequent holdings applying that decision, which do not limit Apprendi to incarceration. In addition, the decision presents a recurring issue of national importance because fines are a significant element of criminal sentencing and the issue posed here can be outcome determinative in numerous sentencing contexts. This Court should grant review to ensure consistent application of Apprendi s principles to all penalties including criminal fines. A. Factual Background. Southern Union, a diversified natural gas company, was found guilty by a jury of a single count of knowingly storing mercury without a permit in violation of 42 U.S.C. 6928(d)(2)(A), a provision of the Resource Conservation and Recovery Act ( RCRA ). 1 The mercury had been collected by a division of Southern Union, New England Gas Company, in connection with an environmentallyfavorable program to replace mercury seal gas pressure regulators in customers homes with nonmercury regulators. Pet. App. 3a. The charges against Southern Union resulted from an unfortunate incident in which vandals illegally entered a storage facility owned by Southern Union in Pawtucket, 1 Southern Union was acquitted of two other counts, which are not at issue here.

12 4 Rhode Island, broke into a locked cabinet that contained liquid mercury, and spilled some of it on the property as well as at a nearby apartment complex. After the spill was discovered, Southern Union fully cooperated with local and state officials and the Red Cross to remediate the spill s effects and to compensate the residents of the apartment complex who were temporarily displaced spending more than $6 million to do so. Id. at. 6a. This incident was the first time in Southern Union s 80- year history that it was even charged with any crime much less convicted of one. B. Proceedings Below. The indictment charged Southern Union with storing mercury without a permit [f]rom on or about September 19, 2002 until on or about October 19, Pet. App. 25a. As the court of appeals acknowledged, Southern Union s prime defense at trial was that the mercury was not a waste, but rather was a commercial chemical product that the company intended to recycle. 2 Id. at 7a. Accordingly, the company presented evidence at trial from which the jury could have found that for at least some of the period of the indictment, it had treated the [liquid] mercury as a recyclable resource rather than as waste. Id. at. 24a. For example, Southern Union produced evidence that at several points throughout the indictment period, and as late as the 2 Under EPA regulations, liquid mercury is a commercial chemical product[] that is only regulated as a waste if and when it is discarded or intended to be discarded. 40 C.F.R Therefore, even though mercury is a hazardous substance, it is also a commercial chemical product that can be stored for any length of time if it is being held for eventual reclamation. Such storage requires no hazardous waste permit because the material is a product, not a waste.

13 5 summer of 2004 [shortly before the end of the period charged in the indictment], Southern Union employees discussed a potential mercury recycling project. Id. at 33a. The jury instructions did not direct the jury to determine the number of days or the duration of any violation that it found. As the court of appeals explained, the district court instructed the jury that in order to convict it needed only to determine... whether at some point in time the liquid mercury was discarded by being abandoned and therefore ceased to be legally held for future recycling and began to be stored as waste. Pet. App. 33a (emphasis in original). The government did not request a special interrogatory that would have asked the jury to determine the number of days or duration of any violation. The general verdict form simply tracked the indictment, and inquired guilty or not guilty. Id. at 25a. Under RCRA, a single day s violation was sufficient for the jury to return a guilty verdict. At sentencing, the district court applied the penalty provision of 42 U.S.C. 6928(d), which provides for a fine of not more than $50,000 for each day of violation. The pre-sentence report ( PSR ) prepared by the U.S. Office of Probation set the maximum fine for Southern Union s offense at $38.1 million, which it arrived at by multiplying $50,000 times 762, the full number of days referred to in the indictment. Southern Union objected to this calculation on the ground that a fine of more than $50,000 would violate its constitutional rights under Apprendi because the jury did not determine the number of days or duration of the RCRA violation and, therefore, the maximum sentence supported by the jury s verdict was the maximum fine for a one-day violation.

14 6 The district court requested briefs on the Apprendi issue and produced a written decision prior to the sentencing hearing. The government s brief conceded that the jury was not asked to find, and did not find, a particular number or span of days of illegal storage. The government argued, however, that based on the dictum and reasoning of this Court s decision in Oregon v. Ice, 129 S. Ct. 711 (2009), Apprendi does not apply to the imposition of criminal fines, and thus the district court was authorized to find facts that increased the available fine from $50,000 (corresponding to the one day of violation reflected by the jury s verdict) to $38 million (corresponding to 762 days of violation). District Court Decision and Sentencing. The district court initially concluded that Southern Union waived its Apprendi argument because of its failure to respond to the Court s invitation for even greater specificity in the verdict form, its assent to the use of the Indictment language, and its failure to formally place an objection on the record. Pet. App. 43a n.1. The court nevertheless addressed the substance of Southern Union s argument. Id. On the merits, the district court reject[ed] the notion that Apprendi does not apply to fines, expressly stating that it does not believe, as the Government argues, that the Supreme Court recently indicated in dicta anything to the contrary. Pet. App. 44a (citing Oregon v. Ice, 129 S. Ct. 711, 719 (2009)). With respect to the Ice dicta, the district court concluded that [t]he best that can be said about the question is that Apprendi does not prevent a Court from engaging in judicial fact finding to determine the amount of a penalty within the prescribed statutory maximum range, which is something entirely different from finding a fact that

15 7 determines the range. Id. at 45a (emphasis in original). Applying the Apprendi principles, the district court examined 6928(d) and found that the statutory maximum penalty under this provision can only be determined in any particular case after a factual finding is made concerning the number of days a defendant violated the statute. Pet. App. 45a. It then concluded that [b]ecause the maximum statutory penalty is tied to the length of the violation, Apprendi and its progeny requires the jury, and not the Court, to find the dates needed to calculate the maximum fine. Id. The district court nevertheless concluded that there was no Apprendi violation in its finding a RCRA violation of 762 days because the content and context of the verdict all together indicated that the jury determined the necessary dates, Pet. App. 46a, notwithstanding its instruction to the jury that it could convict if it found that Southern Union at some point in time began storing the mercury as waste (and thereby violated RCRA), id. at 33a (emphasis in original). The district court reasoned that [f]rom the verdict form, it is clear that the jury conclusively found beyond a reasonable doubt that the Defendant s conduct ended on October 19, 2004 and that it began on or about September 19, Id.; see also id. at 47a (noting that the evidence introduced was clear.... that the precise date for establishing the maximum penalty is in fact September 19, 2002 ). The district court therefore overruled Southern Union s objection to the PSR and set the maximum fine that may be imposed against the Defendant at $38.1 million as stated in the pre-sentence report.

16 8 Pet. App. 48a. After a sentencing hearing, the district court imposed a $6 million fine and a $12 million community service obligation. Id. at 24a. 3 Southern Union appealed both the verdict and its sentence. First Circuit Decision. In addition to rejecting Southern Union s other challenges to the verdict, which are not at issue here, the First Circuit rejected Southern Union s challenges to its sentence. The court of appeals first held that Southern Union adequately preserved an objection to the fine on the ground that it was imposed in violation of Apprendi because Southern Union had raised this objection at sentencing. Pet. App. 24a. The court of appeals specifically noted that [t]he prosecution did not seek the district court s waiver ruling and does not press it on appeal. Id. at 24a n.12; see also Br. for the Appellee, United States of America at 38, United States v. S. Union Co., No (1st Cir. Apr. 7, 2010) ( U.S. First Cir. Br. ) (the government does not press the [district] court s waiver ruling a ruling it did not seek below ). On the merits, the court of appeals described the Apprendi issue as one of initial impression that was both important and close. Pet. App. 1a-2a. The court first considered this Court s holdings in Apprendi and its progeny. It acknowledged that [t]hese cases do not distinguish among types of penalties or punishment, leaving the broad language unglossed, but concluded that none of the 3 The district court specifically noted that the $12 million community service obligation was not restitution. See Sentencing Transcript at 54, United States v. S. Union Co., No (D.R.I. Oct. 2, 2009) ( The fourth [sentencing] factor [the court must consider] is restitution, and I don t see that to be a factor at all in this case. ).

17 9 cases expressly addresses whether criminal fines are encompassed within the Apprendi rule. Id. at 27a. It then concluded that the Apprendi rule does not apply to the imposition of statutorily prescribed fines, Pet. App. 2a, relying on two aspects of this Court s decision in Oregon v. Ice, 129 S. Ct. 711 (2009). This Court in Ice rejected an Apprendi challenge to a state sentencing provision that allowed judges to find facts justifying the imposition of consecutive, rather than concurrent, sentences of incarceration following the jury s verdict convicting the defendant of multiple crimes. First, the court of appeals relied on a reference in Ice to criminal fines, although it conceded the reference was dicta. Pet. App. 28a. The court of appeals stated: Observing that many states permit judicial factfinding on matters other than the length of incarceration, the Court explained that [t]rial judges often find facts about the nature of the offense or the character of the defendant in determining, for example, the length of supervised release following service of a prison sentence; required attendance at drug rehabilitation programs or terms of community service; and the imposition of statutorily prescribed fines and orders of restitution. The Court warned that applying Apprendi to these types of determinations surely would cut the rule loose from its moorings. Id. at 28a-29a (quoting Ice, 129 S. Ct. at 719) (emphasis in original; internal citation and footnote omitted). The court of appeals concluded that this dicta was entitled to great weight and characterized it as an express statement... that it is inappropriate to extend Apprendi to criminal fines. Id. at 28a.

18 10 Second, the First Circuit relied on this Court s consideration in Ice of the history at common law of the practice... challenged, which the court of appeals viewed as a logic and method that alter[ed] any previous broad understanding of Apprendi. Pet. App. 28a; see also id. at 31a (noting that its view that Ice has effected a change in the application of the Apprendi rule is supported by the dissent in Ice, which stated that the majority opinion had altered the method of analysis underlying Apprendi ). Applying what it viewed to be Ice s reasoning and logic, the court of appeals stated that it is now highly relevant that, historically, judges assessed fines without input from the jury. Id. at 30a. Indeed, the court of appeals concluded that the government presented strong evidence of historic practice that at common law, judges discretion in imposing fines was largely unfettered. Id. at 31a. The First Circuit, however, acknowledged that its decision conflicts with that of its sister circuits. In a footnote, the First Circuit pointed out that two circuits have applied Apprendi to criminal fines one before Ice and one after but simply noted that these cases could not or did not discuss Ice. Pet. App. 32a n.17 (citing United States v. Pfaff, 619 F.3d 172 (2d Cir. 2010), and United States v. LaGrou Distrib. Sys., Inc., 466 F.3d 585 (7th Cir. 2006)). The First Circuit also held, [i]n the interest of judicial economy and efficiency, that if we are wrong and if Apprendi does apply to criminal fines, it would be necessary to remand for resentencing because [t]he district court erred in holding, despite the absence of a special interrogatory, that the jury necessarily found beyond a reasonable doubt that Southern Union had violated RCRA during all or nearly all of the date range in the indictment. Pet.

19 11 App. 32a-33a. The court of appeals noted that the government essentially concedes and we agree that the jury did not necessarily determine the number of days of violation. See U.S. First Cir. Br. at 38 ( the government concedes that the [district] court s verdict-based ruling reads too much into the on or about dates and the quoted instruction. Put simply, the jury was not asked to find a particular number or span of days of illegal storage ). The court also reject[ed] the prosecution s suggestion that the evidence was so overwhelming that no reasonable jury could conclude other than that the mercury was treated as waste throughout the period in the indictment. Pet. App. 33a-34a. In short, the court of appeals concluded that any error under Apprendi was not harmless. Id. at 2a. 4 The First Circuit denied rehearing and rehearing en banc. REASONS FOR GRANTING THE PETITION The decision below merits review because it conflicts with the decisions of other courts of appeals on the important question of whether the Apprendi principle applies to criminal fines. The decision also conflicts with the clear holding in Apprendi and this Court s subsequent decisions. To the extent the issue has been clouded by the dicta in Ice, only this Court s review can bring the needed clarity to this important and recurring Fifth and Sixth Amendment issue. 4 The court of appeals also rejected Southern Union s argument that the fine imposed was excessive. Pet. App. 35a- 38a. That ruling is not challenged here.

20 12 I. THE DECISION BELOW CONFLICTS WITH DECISIONS OF OTHER COURTS OF APPEALS THAT APPLY THE APPRENDI PRINCIPLE TO CRIMINAL FINES. This Court held in Apprendi that any fact other than the fact of a prior conviction that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt. Apprendi, 530 U.S. at 490. Apprendi does not speak only to incarceration, and this Court has not construed it that way. Since Apprendi was decided, this Court has applied its holding in contexts involving enhanced penalties, including death. See, e.g., Blakely v. Washington, 542 U.S. 296 (2004); Ring v. Arizona, 536 U.S. 584 (2002); United States v. Booker, 543 U.S. 220 (2005); and Cunningham v. California, 549 U.S. 270 (2007). It also has clarified that the statutory maximum for Apprendi purposes is the maximum sentence a judge may impose solely on the basis of the facts reflected in the jury verdict or admitted by the defendant. Blakely, 542 U.S. at 303 (emphasis in original). Other courts of appeals have applied the principles established in Apprendi and its progeny to criminal fines, and have vacated and remanded criminal fines as a result. In United States v. LaGrou Distribution Systems, Inc., 466 F.3d 585, 594 (7th Cir. 2006), for example, the Seventh Circuit vacated and remanded a $1 million fine imposed pursuant to 18 U.S.C. 3571(d) 5 on a corporate defendant that was 5 Pursuant to 18 U.S.C. 3571(c), an organizational defendant that has been found guilty of a felony offense may be sentenced to a statutory fine of $500,000. Alternatively, under 3571(d), any person who derives a pecuniary gain from an offense, or causes a pecuniary loss, can be fined not more than the greater

21 13 convicted by a jury of violating federal food safety laws, where at sentencing, it was the district judge using a preponderance of the evidence standard to find the loss amount, not a jury finding loss amount beyond a reasonable doubt. The Seventh Circuit held that this procedure constituted error because [t]he Sixth Amendment requires that any fact (other than the fact of prior conviction) that increases the maximum penalty for a crime beyond the prescribed statutory maximum must be proved to a jury beyond a reasonable doubt. 466 F.3d at 594 (quoting Apprendi, 530 U.S. at 490). Notably, the government confessed error in LaGrou. It concede[d] that the [Apprendi] rule does apply to criminal fines because they are penalties for criminal offenses and concede[d] that the $1 million fine had to be vacated and remanded for resentencing because the district court did not purport to apply a beyond-a-reasonable doubt standard of proof as to the gross loss amount that was the basis for increasing the fine beyond the prescribed $500,000 maximum. Br. and App. of the United States at 33-34, United States v. LaGrou, No (7th Cir. Dec. 20, 2005); see also id. at 33 ( Apprendi does apply to monetary fines, that is, any fact increasing the maximum fine above the prescribed statutory maximum must be proven beyond a reasonable doubt ). The government expressly noted in its brief that [t]his concession was made in consultation with the Office of the Solicitor General. Id. at 33 n.12. The Second Circuit similarly vacated and remanded a criminal fine as violating the Apprendi principle in of twice the defendant s gross gain or twice the victim s gross loss.

22 14 United States v. Pfaff, 619 F.3d 172 (2d Cir. 2010), cert. denied, 79 U.S.L.W (June 27, 2011) (Nos & ), applying a plain error standard. In Pfaff, an individual was convicted of twelve counts of tax evasion and fined $6 million pursuant to 3571(d). The jury, however, made no findings regarding the amount of pecuniary loss caused, or gain derived, by [the defendant] through his crimes. Id. at 174. Instead, the district court made a finding of the amount of pecuniary loss caused, and used its finding to calculate the defendant s maximum fine under 3571(d). Id. The Second Circuit held that this was error under Apprendi because the $6 million fine was supported only by the district court s own pecuniary loss finding, absent which the maximum fine supported by the jury s verdict alone would have been $3 million. Id. at 175; see also id. ( it is the clear implication of Apprendi and Blakely that when a jury does not make a pecuniary gain or loss finding, 3571 s default statutory maximums cap the amount a district court may fine the defendant ). The court of appeals further found this error to be plain because the analysis flow[ed] ineluctably from Apprendi and Blakely. Id. at The government did not argue in Pfaff that the Apprendi principle is inapplicable to criminal fines. Instead, the government argued that there was no Apprendi violation in that case because the fine did not exceed the statutory maximum. Br. for the United States at , United States v. Pfaff, No (2d Cir. Jan. 15, 2010). The government s brief in Pfaff was filed one year after this Court issued its decision in Ice, and also after the government argued in its district court brief in this case that the Apprendi principle does not apply to fines. In addition, the government did not seek certiorari on the sentencing issue.

23 15 Similarly, in United States v. Yang, 144 F. App x. 521 (6th Cir. 2005), the Sixth Circuit vacated and remanded a $5 million criminal fine against a closelyheld corporation on the ground that it violated Booker, again applying a plain error standard. The court of appeals noted that it was undisputed that, pursuant to the mandatory federal sentencing guidelines in place at the time, the district court enhanced [the corporation s] sentence based on the court s factual findings concerning the amount of the loss caused by the corporation s criminal acts, and held that this enhancement of the fine based on judge-found facts under a mandatory guidelines system constituted Sixth Amendment error that was plain. Id. at 524. At least one other court of appeals has assumed that the Apprendi principle applies to the imposition of criminal fines. In United States v. West Coast Aluminum Heat Treating Co., 265 F.3d 986, 994 (9th Cir. 2001), the Ninth Circuit addressed the merits of an Apprendi challenge to a corporate criminal fine imposed under 3571, and found no Apprendi violation only because the fine did not exceed the statutory maximum. In addition, several federal district courts 7 and state supreme courts 8 have 7 See, e.g., Damper v. United States, 2006 U.S. Dist. LEXIS 53800, at *7 (S.D. Miss. July 11, 2006) (addressing Apprendi challenge to fine, but finding no violation because the fine was within the statutory maximum); Lauria v. United States, 2006 U.S. Dist. LEXIS 90010, at *63 n.14 (D. Conn. Dec. 13, 2006) (same); Shkolir v. United States, 2002 U.S. Dist. LEXIS 9830, at *5 (S.D.N.Y. May 31, 2002) (same); United States v. Boothe, 2001 U.S. Dist. LEXIS 16745, at *18-19 (E.D. La. Oct. 5, 2001) (same). 8 State v. Cain, 888 A.2d 276, (Me. 2006) (addressing Apprendi challenge to fine, but finding no violation because the

24 16 assumed that the Apprendi principle applies to the imposition of criminal fines. Commentators likewise have observed that the Apprendi principle logically applies to the imposition of criminal fines. 9 The court of appeals ruling below is wholly at odds with all of these authorities. The First Circuit unequivocally held that the Apprendi rule does not apply to the imposition of statutorily prescribed fines. Pet. App. 2a. As a result, it did not address the merits of Southern Union s Apprendi challenge, and affirmed the fine in its entirety a fine 360 times greater than that supported by the jury s verdict. Moreover, the court of appeals acknowledged that the Second and Seventh Circuits have applied Apprendi to criminal fines, but made no attempt to harmonize the conflict, other than to note that these other cases could not or did not discuss Ice. Id. at 32a n.17. At the same time, the court of appeals essentially invited this Court s review by acknowledging that the issue is close and by stating several times in its opinion that if its holding that the Apprendi principle does not apply to criminal fines is wrong, then a fine was within the statutory maximum); State v. Kozlowski, 898 N.E.2d 891, 909 (N.Y. 2008) (addressing Apprendi challenge to fines, but finding that any Apprendi violation was harmless because defendants own trial testimony established the facts supporting the fines). 9 See, e.g., Phillip C. Zane, Booker Unbound: How the New Sixth Amendment Jurisprudence Affects Deterring and Punishing Major Financial Crimes and What to Do About It, 17 Fed. Sent g Rep. 263, 263 (2005) ( The recent Sixth Amendment jurisprudence that culminated in Booker will have an effect on the determination of a fine.... ); John M. Connor & Robert H. Lande, How High Do Cartels Raise Prices? Implications for Optimal Cartel Fines, 80 Tul. L. Rev. 513, (2005); Timothy A. Johnson, Sentencing Organizations After Booker, 116 Yale L. J. 632, 661 n.201 (2006).

25 17 remand is necessary. Id. at 2a, 32a-33a, 34a. Of course, only this Court is in a position to decide that question. In sum, it is clear that if Southern Union had challenged the fine levied against it based on Apprendi in the Second, Sixth, and Seventh Circuits, those courts would have addressed the claim on the merits. Accordingly, the decision below creates a fundamentally different legal regime for the imposition of criminal fines in the First Circuit. The prospect that criminal defendants in the First Circuit who receive and challenge criminal fines have categorically different protections under the Fifth and Sixth Amendments is intolerable. This is precisely the kind of decision by geography that this Court grants certiorari to prevent. This case is an appropriate vehicle for resolving this circuit conflict because the facts governing the Apprendi issue are straightforward and fully developed in the record. In addition, the First Circuit conceded that the question of Apprendi s applicability is dispositive and outcome determinative in this case. Pet App. 32a-33a ( if we are wrong and if Apprendi does apply to criminal fines, it would be necessary to remand for resentencing ); see also id. at 2a ( any error under Apprendi was not harmless ). By granting the petition, this Court would provide meaningful guidance concerning whether Apprendi applies to the imposition of criminal fines This petition does not raise or implicate the distinct question whether Apprendi applies to the imposition of restitution in criminal cases. See Pet. App. 29a n.14 (noting that the First Circuit previously has held that the statutory scheme for restitution does not trigger the principles underlying Apprendi because the jury s verdict of guilt automatically

26 18 II. THE COURT OF APPEALS RULING UNDERMINES CRIMINAL DEFENDANTS FIFTH AND SIXTH AMENDMENT RIGHTS. The court of appeals ruling merits this Court s review because it is not faithful to the Fifth and Sixth Amendments, and undermines the fundamental protections that this Court held in Apprendi and subsequent cases derive from those Amendments. The language of Apprendi and its progeny broadly applies to the imposition of criminal punishment or penalties without any qualification or limitation. See, e.g., Apprendi, 530 U.S. at 490 (holding that any fact other than the fact of a prior conviction that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt. (emphasis added); Ring, 536 U.S. at 602 ( If a State makes an increase in a defendant s authorized punishment contingent on the finding of a fact, that fact no matter how the State labels it must be found by a jury beyond a reasonable doubt ) (emphasis added); Blakely, 542 U.S. at 304 (a judge exceeds his authority when he inflicts punishment that the jury s verdict alone does not allow ) (emphasis added); Booker, 543 U.S. at 232 (the jury must find the existence of any particular fact that authorizes restitution in the full amount of the victim s losses ); Pfaff, 619 F.3d at 175 (noting prior Second Circuit holdings that Apprendi does not apply to criminal restitution or forfeiture based on court-determined loss or gain amounts because criminal restitution and forfeiture are indeterminate schemes without statutory maximums ); LaGrou, 466 F.3d at 593 (noting that the Seventh Circuit has consistently held that restitution is a civil remedy, not penal, and therefore the Apprendi line of cases does not apply). As shown, the district court expressly stated that the sentence did not involve restitution. See n.3, supra.

27 19 the law makes essential to [a defendant s] punishment ) (internal quotation marks omitted; emphasis added). As the court of appeals itself acknowledged, [t]hese cases do not distinguish among types of penalties or punishment, leaving the broad language unglossed. Pet. App. 27a. As we already have shown, courts other than the First Circuit below consistently have held (or assumed) that the Apprendi principle applies to the imposition of criminal fines. See Section I, supra. The First Circuit departed from its sister circuits and what it acknowledged is the unglossed language of this Court s prior decisions based on its interpretation of this Court s opinion in Ice. As noted, the court of appeals relied on a reference in Ice to criminal fines that it conceded was dicta. Pet. App. 28a. The court of appeals also relied on this Court s consideration in Ice of the history at common law of the practice... challenged, which the court of appeals viewed as a logic and method that alter[ed] any previous broad understanding of Apprendi. Id. Neither rationale provides a valid basis for the court of appeals holding that Apprendi does not apply to the imposition of criminal fines. With respect to this Court s reference in Ice to criminal fines, it is undisputed that Ice itself did not involve any issue concerning a criminal fine. Rather, the question before the Court was whether the Sixth Amendment mandate[s] jury determination of any fact declared necessary to the imposition of consecutive, in lieu of concurrent, sentences[.] Ice, 129 S. Ct. at 714. Moreover, Ice specifically limited its holding to the multiple conviction context: When a defendant has been tried and convicted of multiple offenses, each involving discrete sentencing prescriptions.... Id. Accordingly, under this

28 20 Court s long-standing precedent, its dicta in Ice concerning fines cannot be controlling because this Court does not decide important questions of law by cursory dicta inserted in unrelated cases. In re Permian Basin Area Rate Cases, 390 U.S. 747, 775 (1968); see also Cent. Va. Cmty. Coll. v. Katz, 546 U.S. 356, 363 (2006) (this Court is not bound to follow [its] dicta in a prior case in which the point now at issue was not fully debated ). In any event, to the extent that the cursory dicta in Ice should be construed, the district court correctly determined that [t]he best that can be said about the question is that this Court was suggesting that Apprendi should not be construed to prevent a Court from engaging in judicial fact finding to determine the amount of a penalty within the prescribed statutory maximum range, which is something entirely different from finding a fact that determines the range. Pet. App. 45a (emphasis in original). In the Ice dicta, this Court was addressing judicial factfinding about the nature of the offense or the character of the defendant classic inquiries that sentencing courts undertake to assess the amount of a fine within a prescribed range. Accordingly, nothing in Ice suggests that this Court was addressing the fundamentally different type of judicial fact-finding at issue here: judicial factfinding that determines whether a crime was committed on any of the days charged in the indictment, and if so, on which days. As Ice itself recognized, Apprendi and its progeny are rooted in the historic jury function determining whether the prosecution has proved each element of an offense beyond a reasonable doubt. 129 S. Ct. at 714. Yet here, where the jury s verdict was limited to a single day s violation, the First Circuit affirmed the

29 21 district court s imposition of a sentence based on its own finding that the prosecution had proved each element of the offense beyond a reasonable doubt for each of the 762 days charged in the indictment. The First Circuit also declared that Ice alter[ed] any previous broad understanding of Apprendi by requiring an analysis of historic sentencing practices. Pet. App. 28a. As an initial matter, the court of appeals suggestion that Ice employed a new logic and method that alter[ed] any previous broad understanding of Apprendi, id., is puzzling because this Court in Apprendi engaged in that very analysis of common law and historic sentencing practices and relied upon those practices in ascertaining the Founders understanding of the Sixth Amendment s jury trial guarantee. Apprendi, 530 U.S. at ; id. at (Thomas, J., concurring). As this Court has stated, the Apprendi rule is rooted in longstanding common-law practice. Cunningham, 549 U.S. at 281; see also Harris v. United States, 536 U.S. 545, 557 (2002) (plurality opinion) ( Apprendi said that any fact extending the defendant s sentence beyond the maximum authorized by the jury s verdict would have been considered an element of an aggravated crime and thus the domain of the jury by those who framed the Bill of Rights ) (emphasis added); Blakely, 542 U.S. at 302 (stating that the Apprendi principles have been acknowledged by courts and treatises since the earliest days of graduated sentencing and that this Court compiled the relevant authorities in Apprendi ). In any event, the First Circuit s historical analysis is fundamentally flawed because it misapprehends this Court s reasoning and conclusions in Apprendi that were based on historical sentencing practices. When this Court s reasoning and conclusions are

30 22 properly understood, the First Circuit s holding that the Apprendi principles do not apply to the imposition of criminal fines cannot withstand scrutiny. In Apprendi, this Court found that any distinction between an element of an offense and a sentencing factor was unknown to criminal practice as it existed during the years surrounding our Nation s founding. Apprendi, 530 U.S. at 478. This was so, the Court explained, because judges in that period had very little explicit discretion in sentencing with respect to felonies because substantive criminal laws were sanction-specific, i.e., they prescribed a particular sentence for each offense. Id. at 479. This distinction was also unknown in the common law of punishment for misdemeanors, which was dependent upon judicial discretion because judges were subject to few restraints in sentencing offenders to the most commonly imposed punishments of fines or whippings. Id. at 480 n.7. This Court also noted that there was a 19th century shift in this country from statutes providing fixed-term sentences to those providing judges discretion within a permissible range. Id. at 481; see also id. ( We have often noted that judges in this country have long exercised discretion... in imposing sentences within statutory limits in the individual case ) (emphasis in original) (citing Williams v. New York, 337 U.S. 241, 246 (1949)). Based on this historic link between verdict and judgment and the consistent limitation on judges discretion to operate within the limits of the legal penalties provided, this Court concluded in Apprendi that the proper understanding of the Sixth Amendment jury trial guarantee is that it does not permit a legislative scheme that removes the jury

31 23 from the determination of a fact that, if found, exposes the criminal defendant to a penalty exceeding the maximum he would receive if punished according to the facts reflected in the jury verdict alone. 530 U.S. at (emphasis in original). As this Court further explained in Blakely, this rule gives intelligible content to the right of jury trial by ensuring that the judge s authority to sentence derives wholly from the jury s verdict. Without that restriction, the jury would not exercise the control that the Framers intended. Blakely, 542 U.S. at Against the background of this Court s historical analysis in Apprendi, the First Circuit s reasoning and conclusion are misguided. The court of appeals first noted that in light of Ice, it is now highly relevant that, historically, judges assessed fines without input from the jury. Pet. App. 30a. This ignores, however, that, as Apprendi s discussion makes clear, judges historically assessed all forms of criminal punishment without input from the jury. Accordingly, the fact that judges historically imposed fines does not provide any support for the court of appeals conclusion that the Apprendi rule does not apply to the imposition of criminal fines. The courts of appeals further relied on the fact that judges historically had discretion to determine the amount of any fine imposed. Pet. App. 30a; see also id. at 31a (noting that at common law, judges discretion in imposing fines was largely unfettered ). The court of appeals stated that this sentencing practice was in direct contrast with the Supreme Court s reasoning in the Apprendi context that English judges had little sentencing discretion. Id. at. 30a. The First Circuit s attempt to distinguish Apprendi on this ground misapprehends this Court s

32 24 historical discussion in Apprendi. Apprendi did not hold or suggest that modern sentencing practices are subject to the Apprendi rule only if they derive from common law sentencing practices that minimized judicial discretion. Instead, this Court in Apprendi simply compiled and examined common law sentencing practices some of which constrained judicial discretion and some of which did not as well as the subsequent American shift to sentencing ranges, to determine the nature and extent of judicial discretion in sentencing that is consistent with the Sixth Amendment s jury trial guarantee. As noted, the Court concluded from all of the historical evidence that the fundamental limit that the Sixth Amendment imposes on judicial sentencing is that judicial fact-finding cannot expose[] the criminal defendant to a penalty exceeding the maximum he would receive if punished according to the facts reflected in the jury verdict alone. Apprendi, 530 U.S. at (emphasis in original). See also id. at 481 ( We should be clear that nothing in this history suggests that it is impermissible for judges to exercise discretion taking into consideration various factors relating both to offense and offender in imposing a judgment within the range prescribed by statute ) (emphasis in original). Nothing in this analysis supports the First Circuit s conclusion that Apprendi does not apply to fines because judges at common law had discretion in assessing fines. Moreover, the fact that this Court in Apprendi was well aware of and expressly noted that judges historically had discretion in assessing fines and certain other forms of punishment further underscores that the First Circuit reached the wrong result. Because this Court s historical analysis in

33 25 Apprendi relied in part on sentencing practices concerning fines and encompassed all forms of punishment imposed at common law without qualification, the First Circuit was wrong to conclude that there is a separate common law history concerning the imposition of fines that leads to a different interpretation of the Sixth Amendment as applied to them. Indeed, this Court s conclusions in Apprendi about the Founders understanding of the Sixth Amendment s jury trial guarantee are arguably on a stronger historical footing with respect to fines than incarceration because in both England and the colonies, fines were one of the two main forms of noncapital punishment at the time the Bill of Rights was drafted (the other being corporal punishments such as whippings ), while imprisonment did not even emerge as a common penological practice in the United States until the late eighteenth and the early nineteenth century. 11 Therefore, the historical analysis that this Court relied on to derive the Apprendi rule applies with equal force to both criminal fines and incarceration. The First Circuit s holding to the contrary simply cannot be squared with Apprendi s historical analysis. 11 Erik Lillquist, The Puzzling Return of Jury Sentencing: Misgivings About Apprendi, 82 N.C. L. Rev. 621, (2004); see also id. at (noting that some States initially resisted imprisonment as a punishment and a few did not change their practices at all until after the Civil War); Kathryn Preyer, Penal Measures in the American Colonies: An Overview, 26 Am. J. Legal Hist. 326, 329 (1982) ( Imprisonment, although provided for as a punishment in some colonies, was not a central feature of criminal punishment until a later time ).

34 26 III. THE COURT OF APPEALS RULING POSES AN ISSUE OF FUNDAMENTAL IMPORTANCE. The court of appeals ruling that the Apprendi principle does not apply to the imposition of criminal fines also presents a recurring and important question of federal law that warrants this Court s review. See Sup. Ct. R. 10(c). As a general matter, this Court s frequent return in recent years to issues raised by its Apprendi decision reflects its commitment to ensuring that the Fifth and Sixth Amendment principles governing criminal sentencing are applied consistently across the country. This Court has granted certiorari in a number of cases to resolve conflicts and issues concerning the scope and application of Apprendi and its growing progeny. See, e.g., Harris, 536 U.S. 545; Ring, 536 U.S. 584; Blakely, 542 U.S. 296; Booker, 543 U.S. 220; Cunningham, 549 U.S. 270; Rita v. United States, 551 U.S. 338 (2007); and Ice, 129 S. Ct In addition, the implications of the issues raised in this case are enormous. Criminal fines are a significant element of criminal sentencing, both for individuals and corporations, particularly in an era of increasing criminal enforcement of regulatory violations and vigorous enforcement of anticorruption laws. In 2010, 9.3% of criminal sentences in the federal courts involved fines. 12 For 12 See U.S. Sentencing Comm n, 2010 Annual Report, at 32 (chart), available at /Annual_Reports_and_Sourcebooks/2010/ar10toc.htm. The U.S. Sentencing Commission receives reports of the sentences imposed for all felony offenses and all Class A misdemeanors in the United States courts. Id. at 30 n.57.